48482344
24741859
108910
-4881398
-21553272
47307593
47308
16624566
2562026
-24511687
125557
76759
39904
835802
49250
569042
49249674
719638
10000
106601
180500
193180
4123
0.001
22673
20028
835802
18672746
49249674
65514
300000000
6625493
21000
17977
-5789691
-24511687
49249674
49250
18672746
2581001
13044
1156000
7736
1375865
36642
208679
629470
5146872
-28223385
122790
37988
126232
2594386
47160
528009
-1674105
47160435
2501904
10000
101524
9000
38505
1386502
498976
0.001
15020
439203
2594386
24661344
47160435
49485
300000000
7783372
17977
-5188986
-28223385
-1674105
47160435
47160
24661344
1881000
2032
578681
29703
155000
108170
3758082
483879
41983
239265
41000
-15596
-27201
4709
433658
-2219373
-3928
19980
295877
-2958415
239265
54414
115568
-2958415
1291865
-142769
504396
-4862
250000
391675
47452
15596
1495000
-2815646
309505
1495000
2353233
-104787
-1905
141500
551321
43343
-12082
17199
2857629
2130182
45877
-2958415
-0.06
48099333
19980
45877
-2958415
1495000
356
1495
354921
65
65126
26
27034
239265
249644
1493505
45812
19954
19980
52141
381517
FY
No
ABHD
ABTECH HOLDINGS, INC.
Yes
false
Smaller Reporting Company
2011
10-K
2011-12-31
0001405858
No
--12-31
79146
135546
<div>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">
<b><u>NOTE 5 - COMMITMENTS</u></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
 </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
<i><u>Capital Leases</u></i> – As of December 31, 2011 and
2010 the Company had no assets under capital lease.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
<i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
<i><u>Operating Leases</u></i> – The Company leases office
and warehouse space, office equipment and an automobile under
various noncancelable operating leases that extend through February
2013. Total rental expense charged to operations during the years
ended December 31, 2011 and 2010 were $271,906 and $259,944,
respectively. Future annual minimum lease payments for the next
five years, under noncancelable operating leases with initial or
remaining terms of one year or more, as of December 31, 2011, are
as follows: 2012: $273,008; and 2013: $29,278; Total: $302,286.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
 </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
<i><u>Indemnification Agreements</u> -</i> The Company enters into
indemnification provisions under its agreements with officers and
directors and companies in its ordinary course of business,
typically with business partners, customers, landlords, lenders and
lessors. Under these provisions the Company generally indemnifies
and holds harmless the indemnified party for losses suffered or
incurred by the indemnified party as a result of the
Company’s activities or, in some cases, as a result of the
indemnified party’s activities under the agreement. The
maximum potential amount of future payments the Company could be
required to make under these indemnification provisions is
unlimited. The Company has not incurred material costs to defend
lawsuits or settle claims related to these indemnification
agreements. As a result, the Company believes the estimated fair
value of these agreements is minimal. Accordingly, the Company has
no liabilities recorded for these agreements as of December 31,
2011.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
 </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
<i><u>Other Commitments</u></i> – The Company has other
commitments for consulting fees that extend through 2012 amounting
to $90,400. These commitments are cancellable on 15-30 days
notice.</p>
</div>
-489655
-11606
-489655
-1592
60516
537152
<div>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b>NOTE 13 – DEBT REPAYMENT</b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In March 2011, the Company initiated an offering to raise funds to
repay approximately $1,960,000 of existing debt obligations of
AbTech that were then due or would become due during 2011 (the
“Targeted Notes”). Investors in the offering
(“New Investors”) were given the option to either
purchase a portion of the Targeted Notes and convert it immediately
to ABHD common stock, or buy new convertible notes from ABHD (the
“New Notes”) that would convert to ABHD common stock.
The intended objective was to complete the transactions with the
same net effect as if all the Targeted Notes were converted by
their terms to ABHD common stock. Accordingly, the conversion rate
given New Investors for conversion of either the purchased Targeted
Notes or the New Notes was a blended rate of approximately $0.57
per share. The Company received $747,100 from New Investors
interested in purchasing Targeted Notes. These funds were forwarded
to the Targeted Note Holders to purchase the Targeted Notes. The
New Investors subsequently converted the purchased Targeted Notes
to 1,320,454 shares of ABHD common stock.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In addition, during the nine months ended September 30, 2011, the
Company received $975,000 from New Investors interested in buying
New Notes. From these proceeds the Company repaid approximately
$604,100 of outstanding debt and used the balance of the funds for
operating capital. The New Notes were all automatically converted
to shares of ABHD common stock resulting in the issuance of
1,723,255 shares of common stock by the Company.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Due to the beneficial conversion feature implied in these
transactions, at the time of each investment by a New Investor the
applicable Targeted Notes or New Notes were discounted by the
lesser of: (i) the intrinsic value of the beneficial conversion
feature, or (ii) the proceeds realized from the New Investor. These
discounts aggregated $1,620,955 and were charged to additional paid
in capital and interest expense. The Targeted Notes that were
purchased by New Investors and the New Notes issued to New
Investors were converted by the New Investors into shares of ABHD
common stock during the second quarter of 2011 and upon such
conversion the discounts were charged to income as interest
expense.</p>
</div>
-3926581
-154675
159657
320533
3084474
-5385803
135546
-2767
2078704
<div>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 17 – SUBSEQUENT EVENTS</u></b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In February, 2012, the Company sold an additional $2,600,000 of
Secured Notes and warrants in the final closing of the September
Offering (see NOTE 14 – PRIVATE PLACEMENTS), bringing the
total amount raised in the September Offering to $6,600,000.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In February, 2012, two stockholders holding a total of 206,667
shares of AbTech Industries Series A Preferred Stock elected to
convert such shares into 1,321,908 shares of ABHD common stock in
accordance with the terms of the Merger Agreement (see Note 12
– REVERSE ACQUISITION TRANSACTION).</p>
</div>
242052
-4896148
6497100
-1723244
<div>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 16 – LITIGATION, CLAIMS AND
ASSESSMENTS</u></b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Company experiences routine litigation in the normal course of
its business. The Company is not aware of any pending or threatened
litigation that would have a material adverse effect on the
Company’s financial condition, results of operations or cash
flows.</p>
</div>
634109
-5077
1620955
3063690
<div>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>NOTE
12 – REVERSE ACQUISITION TRANSACTION</b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
On February 10, 2011, ABHD closed a reverse acquisition transaction
(the “Merger”) with its wholly-owned subsidiary, Abtech
Merger Sub, Inc., and AbTech pursuant to an Agreement and Plan of
Merger dated July 17, 2010. As a result of the Merger, ABHD
acquired all of the issued and outstanding common stock of AbTech
in exchange for the common stockholders of AbTech (including Series
A preferred stockholders and holders of convertible debt with
rights to convert their holdings into shares of AbTech common
stock) acquiring an approximate 78% ownership interest in ABHD. In
addition, AbTech became the “Surviving Corporation” a
majority-owned subsidiary of ABHD, and ABHD acquired the business
and operations of AbTech.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify"><i>Issuance of Common Stock
–</i> At the closing of the Merger, ABHD issued 32,009,801
shares of its common stock to the stockholders of AbTech in
exchange for 100% of the issued and outstanding common stock of
AbTech. Immediately prior to the Merger, ABHD had 10,000,000 shares
of common stock issued and outstanding, excluding the shares issued
as part of a $3 million funding required by the Merger Agreement.
$1,645,000 of the $3 million funding was received by ABHD prior to
closing ($150,000 of the $1,645,000 was received after December 31,
2010). The financier issued a promissory note (the
“Note”) to ABHD for the $1,355,000 balance of the
financing commitment which was to be funded in cash after the
Merger closing. The Note was secured by a total of 1,145,000 shares
of ABHD common stock pledged by the financier (the
“Collateral”). ABHD elected to hold the Note as a
funding commitment only and did not record the Note or issue any
shares in exchange for the Note. Subsequent to the date of the
merger ABHD received $675,000 of the remaining $1,355,000 due on
the Note. Of the 675,000 common shares due to investors for these
payments, the Company issued 500,000 shares and held the remaining
175,000 shares as additional collateral for the Note. In May of
2011, the financier defaulted on the $680,000 balance due on the
Note, released 509,300 shares of the Collateral and relinquished
its rights to the 175,000 shares of additional collateral held by
the Company.</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify"><i>Conversion of AbTech’s
Preferred Stock</i> – At the effectiveness of the Merger,
1,439,614 shares of Series A Preferred Stock (“Preferred
Stock”) of AbTech outstanding immediately prior to the Merger
were converted into 1,439,614 shares of preferred stock of
Surviving Corporation (i.e. AbTech, post-Merger). The privileges,
rights, and preferences of the Preferred Stock were not affected or
altered by such conversion. Accordingly, the Preferred Stock may be
converted at any time into common shares of AbTech as the Surviving
Corporation and subsequently such common shares of the Surviving
Corporation will be exchanged for shares of the common stock of
ABHD at the same exchange rate in effect for common shares of
AbTech at the date of the Merger (the “Merger
Consideration”). The preferred stockholders that elected to
not convert and exchange their shares for ABHD common shares,
represent the non-controlling interest shown on the Consolidated
Balance Sheet as of December 31, 2011. Because the consolidated
balance sheet as of December 31, 2010 has been restated to give
retroactive effect to the Merger, the common stock shown as of
December 31, 2010 includes the par value ($.001 per share) of the
10,000,000 shares of ABHD stock outstanding at the time of the
merger plus all shares of AbTech common and preferred stock
outstanding as of the December 31, 2010, as if converted into ABHD
common shares at the Merger exchange rate. Because some of the
preferred stockholders of AbTech elected to not convert their
shares to ABHD common stock at the time of the Merger, the
consolidated balance sheet as of December 31, 2011 shows a decrease
in the amount of common stock outstanding.</td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify"><i>Conversion of AbTech’s
Warrants –</i> At the effectiveness of the Merger, 480,266
warrants to purchase AbTech common stock outstanding immediately
prior to the Merger were converted into warrants to purchase
2,557,153 shares of common stock of ABHD. At the effective time of
the Merger, 471,444 warrants to purchase AbTech Preferred Stock
outstanding immediately prior to the Merger were converted into
warrants to purchase 471,444 shares of preferred stock of the
AbTech as the Surviving Corporation. The aggregate exercise price
and other terms of such warrants were not affected or altered by
such conversion and, upon exercise of any such warrants, the shares
of preferred stock received upon such exercise would be convertible
at any time for common shares of AbTech, whereupon such common
shares would be exchanged for the Merger Consideration.</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify"><i>Conversion of AbTech’s
Options –</i> At the effectiveness of the Merger, options to
purchase 992,000 shares of AbTech common stock outstanding
immediately prior to the Merger were converted into options to
purchase 5,281,855 shares of common stock of ABHD. The aggregate
exercise price and other terms of such options were not affected or
altered by such conversion.</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify"><i>Conversion of AbTech‘s
Convertible Debt</i> – As of the closing of the Merger,
$3,980,666 of outstanding notes of the Company that were
convertible into Preferred Stock of AbTech prior to the Merger were
retained by the holders and $1,347,372 of such notes were converted
into 1,919,315 shares of common stock of ABHD.</td>
</tr>
</table>
</div>
458006
27635
463235
11606
115000
142836
-3662559
-123624
<div>
<p style="TEXT-ALIGN: left; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 3 - INVENTORIES</u></b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Inventories consist of the following at December 31:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; WIDTH: 72%; FONT-SIZE: 10pt">Raw
materials</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
76,381</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
85,711</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Work in
process</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">446,538</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">394,540</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Finished
goods</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">106,625</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">221,791</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">Reserve
for obsolescence</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(101,535</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(133,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 0.24in; FONT-SIZE: 10pt">
Total</td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
528,009</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
569,042</td>
</tr>
</table>
</div>
825000
<div>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 4 - FIXED ASSETS</u></b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Fixed
assets consist of the following at December 31:</p>
<table style="WIDTH: 80%" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; WIDTH: 72%; FONT-SIZE: 10pt">
Furniture and fixtures</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
128,093</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
128,093</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Computer
equipment</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">61,831</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">58,231</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Machinery and
equipment</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">250,986</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">242,980</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
Leasehold improvements</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
19,348</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
19,348</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Total</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">460,258</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">448,652</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">Less
accumulated depreciation</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(410,773</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(383,138</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">Net
book value</td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
49,485</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
65,514</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
</tr>
</table>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Depreciation expense charged to operations during 2011 and 2010 was
$27,635 and $27,423, respectively.</p>
</div>
3107596
1382379
-38771
<div>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 15 –FAIR VALUE OF FINANCIAL
INSTRUMENTS</u></b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Company’s financial instruments consist of cash and cash
equivalents, accounts receivable, accounts payable, accrued
liabilities, convertible notes payable, notes payable and warrant
liability. It is management’s opinion that the Company is not
exposed to significant interest, currency or credit risks arising
from these financial instruments. The fair value of these financial
instruments approximates their carrying values based on their short
maturities or for long-term debt based on borrowing rates currently
available to the Company for loans with similar terms and
maturities. Gains and losses recognized on changes in fair value of
financial instruments are reported in other income (expense) as
gain (loss) on change in fair value. The Company estimates the fair
value of level 3 inputs using the Black-Scholes valuation model
using historical volatility as the method to estimate expected
volatility. At December 31, 2011, the Company had no financial
instruments outstanding that were estimated using level 1 or level
2 inputs. The Company’s warrant liability was estimated using
Level 3 inputs as shown in the reconciliation table below for the
year ended December 31, 2011.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: center; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">Fair value measurements using significant unobservable
inputs<br />
(Level 3)</td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt">
Description</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Warrant Liability</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="FONT-SIZE: 10pt">Beginning balance, December 31,
2010</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-LEFT: 0.12in; WIDTH: 86%; FONT-SIZE: 10pt">
 Purchases, issuance and settlements</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
741,028</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Total (gains) or losses</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">(242,052</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Transfers in or out of Level 3</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">Ending balance,
December 31, 2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
498,976</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Company used the following assumptions to estimate the fair
value of the warrant liability at December 31, 2011:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: top">
<td style="BORDER-BOTTOM: windowtext 1pt solid; TEXT-ALIGN: justify; BORDER-LEFT: windowtext 1pt solid; PADDING-LEFT: 5.4pt; WIDTH: 64%; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid">
Expected volatility</td>
<td style="BORDER-BOTTOM: windowtext 1pt solid; TEXT-ALIGN: center; BORDER-LEFT: windowtext 1pt solid; PADDING-LEFT: 5.4pt; WIDTH: 36%; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid">
81.45%</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: top">
<td style="BORDER-BOTTOM: windowtext 1pt solid; TEXT-ALIGN: justify; BORDER-LEFT: windowtext 1pt solid; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid">
Expected dividend yield</td>
<td style="BORDER-BOTTOM: windowtext 1pt solid; TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt; BORDER-RIGHT: windowtext 1pt solid">
0%</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: top">
<td style="BORDER-BOTTOM: windowtext 1pt solid; TEXT-ALIGN: justify; BORDER-LEFT: windowtext 1pt solid; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid">
Expected term</td>
<td style="BORDER-BOTTOM: windowtext 1pt solid; TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt; BORDER-RIGHT: windowtext 1pt solid">
2.3-2.5 years</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: top">
<td style="BORDER-BOTTOM: windowtext 1pt solid; TEXT-ALIGN: justify; BORDER-LEFT: windowtext 1pt solid; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid">
Risk-free interest rate</td>
<td style="BORDER-BOTTOM: windowtext 1pt solid; TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt; BORDER-RIGHT: windowtext 1pt solid">
.83%</td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Company has determined that the Black-Scholes model used to
calculate the fair value of the warrant liability provides a
reasonable estimate at such value considering the terms of the
warrants, and the unlikelihood of events occurring that would
create valuation complexities requiring a more robust analysis by
valuation experts.</p>
</div>
71500
<div>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 9 - INCOME TAXES</u></b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
There is no current or deferred tax expense for the years ended
December 31, 2011 and 2010 due to the Company’s loss position
and the full reserve taken on the Company’s deferred tax
asset in both years.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
A reconciliation of statutory rates is as follows at December
31:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; TEXT-INDENT: 0px; PADDING-LEFT: 0px; WIDTH: 72%; FONT-SIZE: 10pt">
Statutory Rate</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
34.0</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">%</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
34.0</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">%</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt">
State income taxes, net of federal income tax benefit</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">5.0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">5.0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; TEXT-INDENT: -0.12in; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
Reduction in valuation allowance related to net operating loss
carry-forwards and change in temporary differences</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-39.0</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
%</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-39.0</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
%</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
0.0</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">%</td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
0.0</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">%</td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The tax effects of temporary differences that give rise to deferred
tax assets (liabilities) are as follows at December 31:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Deferred tax
assets (liabilities):</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-LEFT: 0.12in; WIDTH: 72%; FONT-SIZE: 10pt">
Net operating loss carryforwards</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
10,447,000</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
9,154,000</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
Accumulated depreciation</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">(13,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">)</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">(13,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">Less
valuation allowance</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(10,434,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(9,141,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">Net
deferred tax assets</td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
</tr>
</table>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
During the years ended December 31, 2011 and 2010, net deferred tax
benefit was approximately $1,293,000 and $520,000, respectively. At
December 31, 2011 and 2010, the Company has federal loss
carryforwards of approximately $27.9 million and $24.6 million,
respectively, and state loss carryforwards of approximately $12.5
million and $9.6 million, respectively, which are available to
reduce future taxes, if any. These net operating loss carryforwards
expire through 2031 and 2016, respectively. <font style="COLOR: black">The net change in the total valuation allowance for
the years ended December 31, 2011 and 2010, was a net increase of
approximately $1,293,000 and $520,000, respectively. Based on the
Company’s loss position and projection of future taxable
income, management believes that it is more likely than not that
the Company will not fully realize the benefit of its net deferred
tax assets.</font> Pursuant to Internal Revenue Code Section 382,
annual utilization of the Company’s net operating loss
carryforwards may be limited if a cumulative change in ownership of
more than 50% is deemed to occur within any three-year period. The
Company believes that the Reverse Acquisition Transaction will not
cause any limitation on future utilization of net operating loss
carryforwards.</p>
</div>
1924957
43642
-41033
<div>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 8 – ACCRUED EXPENSES</u></b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Accrued
expenses consist of the following at December 31:</p>
<table style="WIDTH: 80%" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; WIDTH: 72%; FONT-SIZE: 10pt">
Accrued payroll</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
62,180</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
53,860</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Deferred rent</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">21,941</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">36,172</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Accrued
vacation</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">32,692</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">26,307</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">Accrued warranty
reserve</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">5,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">5,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">Other
accruals</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
977</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
4,218</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
122,790</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
125,557</td>
</tr>
</table>
</div>
86328
3741705
<div>
<p style="TEXT-ALIGN: left; MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif">
NOTE 1 – BUSINESS AND SUMMARY OF ACCOUNTING POLICIES</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif">
Organization and Description of Business</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Abtech Holdings, Inc. (“ABHD” or the
“Company”) (formerly Laural Resources, Inc.), was
incorporated under the laws of the State of Nevada on February 13,
2007, with authorized capital stock of 300,000,000 shares at $0.001
par value.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
AbTech Industries, Inc. (“AbTech”), a Delaware
corporation with an authorized capital of 15,000,000 shares of
$0.01 par value common stock and 5,000,000 shares of $0.01 par
value preferred stock, was acquired by ABHD in a reverse
acquisition transaction (the “Merger”) on February 10,
2011. In accordance with the merger agreement between AbTech and
ABHD (the “Merger Agreement”), ABHD acquired all of the
issued and outstanding common stock of AbTech, including shares
issuable upon the conversion of Series A preferred stock and
convertible promissory notes outstanding, in exchange for the
stockholders of AbTech acquiring 46,000,000 shares of ABHD common
stock. ABHD also agreed to reduce its number of common shares
outstanding to 10,000,000 shares prior to the merger. (See Note 12
– Reverse Acquisition Transaction). The preferred
stockholders of AbTech Industries that elected to not convert and
exchange their shares for ABHD common shares, represent the
non-controlling interest shown on the Consolidated Balance Sheet as
of December 31, 2011.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
For accounting purposes, the transaction has been accounted for as
a reverse acquisition, with AbTech as the acquirer. These
consolidated financial statements of the Company represent a
continuation of the financial statements of AbTech, with one
adjustment, which is to retroactively adjust the legal capital of
AbTech to reflect the legal capital of ABHD. Comparative
information presented in these consolidated financial statements
also have been retroactively adjusted to reflect the legal capital
of the Company.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Company is an environmental technologies firm that provides
innovative solutions to address issues of water pollution. The
Company has developed and patented the Smart
Sponge<sup>®</sup> polymer technology. This technology’s
oil absorbing capabilities make it highly effective as a filtration
media to remove hydrocarbons and other pollutants from flowing or
pooled water. The Company is headquartered in Scottsdale, Arizona
and has a manufacturing facility located in Phoenix, Arizona.</p>
<p style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
AbTech’s wholly-owned subsidiary, Environmental Security
Corporation (“ESC”), was formed by the Company in 2003
to develop a sensor array technology designed to detect impurities
in water flows. ESC owns a U.S. patent on this technology and has
acquired rights to another monitoring technology, but otherwise had
no operations during either 2011 or 2010.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<font style="text-underline-style: none"><b> </b></font></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<font style="text-underline-style: none"><b>Summary of Significant
Accounting Policies</b></font></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Basis of Financial Statement Presentation</u><b>–</b> The
consolidated financial statements include the accounts of ABHD,
AbTech and ESC. Intercompany accounts and transactions have been
eliminated. The consolidated financial statements do not include
the operations of ABHD prior to the date of the Merger which are
considered to be immaterial to the operations of AbTech. The equity
section of the Consolidated Balance Sheets and the basic and
diluted weighted average number of shares outstanding on the
Consolidated Statements of Operations for periods prior to the date
of the Merger have been restated to give retroactive effect to the
merger transaction and to show the shares outstanding at the
Balance Sheet dates as if such shares had been exchanged for ABHD
shares in accordance with the terms of the Merger Agreement. The
equity section of the Consolidated Balance Sheets and the basic and
diluted weighted average number of shares outstanding on the
Consolidated Statements of Operations for periods ended after the
date of the Merger, represents the actual shares of ABHD
outstanding after the share exchanges that occurred as part of the
merger transaction. The non-controlling interest shown on the
Consolidated Balance Sheet as of December 31, 2011, represents the
ownership interest in AbTech of the holders of AbTech Series A
preferred stock that elected not to exchange their Series A
preferred shares for common shares of ABHD as allowed by the Merger
Agreement.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Cash and Cash Equivalents</u> – The Company considers all
highly liquid debt instruments with a maturity of three months or
less when acquired to be cash and cash equivalents.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Use of Estimates</u> – The preparation of financial
statements in conformity with accounting principles generally
accepted in the United States of America requires management to
make certain estimates and assumptions that affect the reported
amount of assets and liabilities and the disclosures of contingent
assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Significant estimates are used in determining the allowance for
doubtful accounts and inventory allowance, in valuing the warrant
liability, beneficial conversion features, stock-based compensation
and stock issued in the reverse merger and in determining the
classification of conversion options embedded in convertible
promissory notes. Due to the uncertainties inherent in the
formulation of accounting estimates, and the significance of these
items, it is reasonable to expect that the estimates in connection
with these items could be materially revised within the next
year.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Concentration of Credit Risk</u> – Credit risk represents
the accounting loss that would be recognized at the reporting date
if counter parties failed completely to perform as contracted.
Concentrations of credit risk that arise from financial instruments
exist for groups of customers or counter parties when they have
similar economic characteristics that would cause their ability to
meet contractual obligations to be similarly affected by changes in
economic or other conditions described below.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify"><i>Cash and cash equivalents
–</i> Financial instruments that subject the Company to
credit risk are cash balances maintained in excess of federal
depository insurance limits. At December 31, 2011, the Company had
$251,249 in cash or cash equivalent balances which were not
guaranteed by the Federal Deposit Insurance Corporation. To date,
the Company has not experienced any losses in such accounts and
believes the exposure is minimal.</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify"><i>Major customers and accounts
receivable –</i> Major customers represent any customer that
accounts for more than 10% of revenues for the year. During 2011,
the Company had two customers that accounted for 29% and 15%,
respectively, of revenues and whose accounts receivable balances
(unsecured) accounted for approximately 0% and 42%, respectively,
of accounts receivable at December 31, 2011. During 2010, the
Company had one customer that accounted for 23% of its revenues and
whose accounts receivable balance (unsecured) accounted for
approximately 12% of accounts receivable at December 31, 2010.</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify"><i>Supplier –</i> Major
suppliers represent any vendor that accounts for more than 10% of
purchases for the year. During 2011, the Company had two vendors
that accounted for 34% and 41%, respectively, of its purchases.
Neither of these vendors had an accounts payable balance at
December 31, 2011. During 2010, the Company had two vendors that
each accounted for more than 10% of its purchases at 14% and 11%,
respectively. Neither of these vendors had an accounts payable
balance at December 31, 2010.</td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; TEXT-INDENT: -0.25in; MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Fair Values of Financial Assets and Liabilities</u>– The
Company measures and discloses certain financial assets and
liabilities at fair value. Authoritative guidance defines fair
value as the exchange price that would be received for an asset or
paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly
transaction between market participants on the measurement date.
Authoritative guidance also establishes a fair value hierarchy
which requires an entity to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair
value. The standard describes three levels of inputs that may be
used to measure fair value:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
<i>Level 1</i> – Quoted prices in active markets for
identical assets or liabilities.</p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
<i>Level 2</i> – Observable inputs other than Level 1 prices
such as quoted prices for similar assets or liabilities; quoted
prices in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities.</p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
<i>Level 3</i> – Unobservable inputs that are supported by
little or no market activity and that are significant to the fair
value of the assets or liabilities.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Company estimates fair value of the warrant liability using the
Black-Scholes valuation model. Significant assumptions were
determined as follows:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in">•</td>
<td style="TEXT-ALIGN: justify">Expected term is determined under
the simplified method using an average of the contractual term and
vesting period of the award as appropriate statistical data
required to properly estimate the expected term was not
available;</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in">•</td>
<td style="TEXT-ALIGN: justify">Expected volatility is measured
using the historical weekly changes in the market price of the
Company’s common stock, disregarding identifiable periods of
time in which share price was extraordinarily volatile due to
certain events that are not expected to recur during the expected
term;</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in">•</td>
<td style="TEXT-ALIGN: justify">Risk-free interest rate is to
approximate the implied yield on zero-coupon U.S. Treasury bonds
with a remaining maturity equal to the expected term of the awards;
and,</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in">•</td>
<td style="TEXT-ALIGN: justify">Forfeitures are based on the
history of cancellations of warrants granted by the Company and
management’s analysis of potential future forfeitures.</td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Inventories</u> – Inventories are stated at the lower of
cost or market, with cost computed on an average cost method which
approximates the first-in, first-out basis. Inventory costs include
raw materials, direct labor and manufacturing overhead. Provision
is made for obsolete, slow-moving or defective items where
appropriate. The amount of any provision is recognized as an
expense in the period the provision occurs.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Warranty Accrual</u> – The Company’s products are
subject to warranty periods of one year or less. The warranty
accrual is based on management’s best estimate of expected
costs associated with product failure and historical product
failures. The Company has not incurred any significant warranty
claims to date.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Fixed Assets</u> – Fixed assets, stated at cost, are
depreciated on the straight-line method for financial statement
reporting purposes, over the estimated useful lives of the assets,
which range from three to ten years. Leasehold improvement costs
are depreciated over the shorter of the lease term or their useful
life. Repairs and maintenance costs are expensed as incurred.
Betterments or renewals are capitalized when they occur.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Deferred Charges</u> – Deferred charges are costs incurred
in connection with the issuance of debt. These costs are
capitalized as an asset and amortized over the term of the debt
using the effective interest method. Amortization expense related
to these deferred charges totaled $142,836 in 2011 and $20,029 in
2010.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Revenue Recognition</u> – The Company recognizes revenue
only when all of the following criteria have been met:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in">•</td>
<td style="TEXT-ALIGN: justify">Persuasive evidence of an
arrangement exists;</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in">•</td>
<td style="TEXT-ALIGN: justify">Delivery has occurred or services
have been rendered;</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in">•</td>
<td style="TEXT-ALIGN: justify">The fee for the arrangement is
fixed or determinable; and</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in">•</td>
<td style="TEXT-ALIGN: justify">Collectability is reasonably
assured.</td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; TEXT-INDENT: -0.25in; MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Persuasive Evidence of an Arrangement</i> – The Company
documents all terms of an arrangement in a quote signed or
confirmed by the customer prior to recognizing revenue.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Delivery Has Occurred or Services Have Been Performed</i>
– The Company performs all services or delivers all products
prior to recognizing revenue. Services are considered to be
performed when the services are complete.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>The Fee for the Arrangement is Fixed or Determinable</i> –
Prior to recognizing revenue, a customer’s fee is either
fixed or determinable under the terms of the quote or accepted
customer purchase order.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Collectability Is Reasonably Assured</i> – Collectibility
is assessed on a customer by customer basis based on criteria
outlined by management.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Company recognizes shipping and handling fees as revenue and
the related expenses as a component of cost of sales. All internal
handling charges are charged to selling, general and administrative
expenses.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Allowance for Doubtful Accounts</u> – The Company
maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required
payments. The allowances are calculated based on a detailed review
of individual customer accounts, historical rates and an estimation
of the overall economic conditions affecting the Company’s
customer base. The Company reviews a customer’s credit
history before extending credit. If the financial condition of its
customers were to deteriorate, resulting in an impairment of their
ability to make payments, additional allowances may be required.
The allowance for doubtful accounts was $16,600 at December 31,
2011 and $14,600 at December 31, 2010.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Customer Deposits</u> – The Company receives from some
distributors a one-time fee for the exclusive distribution rights
to its products. In some cases, this nonrefundable fee represents a
prepayment by the distributor for future product purchases. In such
cases the deposit is recognized as revenue when products are
shipped and the risks and rewards of ownership have been
transferred or when the distributor forfeits the prepayment, in
accordance with the terms of the distribution agreement.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Cost Recognition</u> – Cost of revenues includes all
direct material and labor costs and those indirect costs of
bringing raw materials to sale condition, including shipping and
handling costs. Selling, general, and administrative costs are
charged to operating expenses as incurred. Research and development
costs are expensed as incurred and are included in operating
expenses. Advertising costs are expensed as incurred. Total
advertising costs for 2011 and 2010 were $23,792 and $14,811,
respectively.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Long-Lived Assets</u> – The Company evaluates long-lived
assets for impairment whenever events or changes in circumstances
indicate the carrying amount of an asset may not be recoverable.
When indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the
assets’ carrying amount, the Company measures the amount of
such impairment by comparing the assets' carrying value to the
assets' present value of the expected future discounted cash flows.
Impairment charges, if any, are recorded in the period
realized.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<font style="FONT-SIZE: 10pt"><u>Income Taxes</u> –Deferred
tax assets and liabilities are recognized for the future tax
consequences of temporary differences between the book and tax
basis of assets and liabilities that will result in taxable or
deductible amounts in the future, based on enacted tax laws and
rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are
established to reduce a deferred tax asset to the amount expected
to be realized. The Company assesses its ability to realize
deferred tax assets based on current earnings performance and on
projections of future taxable income in the relevant tax
jurisdictions. These projections do not include taxable income from
the reversal of deferred tax liabilities and do not reflect a
general growth assumption but do consider known or pending events,
such as the passage of legislation. The Company’s estimates
of future taxable income are reviewed annually.</font> <font style="FONT-SIZE: 10pt">All tax positions are first analyzed to determine
if the weight of available evidence indicates that it is more
likely than not that the position will be sustained on audit,
including resolution of any related appeals or litigation
processes. After the initial analysis, the tax benefit is measured
as the largest amount that is more than 50% likely of being
realized upon ultimate settlement. Our income tax returns are
subject to adjustment under audit for approximately the last four
years.</font></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">If the
Company is required to pay interest on the underpayment of income
taxes, the Company recognizes interest expense in the first period
the interest becomes due according to the provisions of the
relevant tax law.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
If the Company is subject to payment of penalties, the Company
recognizes an expense for the amount of the statutory penalty in
the period when the position is taken on the income tax return. If
the penalty was not recognized in the period when the position was
initially taken, the expense is recognized in the period when the
Company changes its judgment about meeting minimum statutory
thresholds related to the initial position taken.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Stock-Based Compensation</u> – All share-based payments to
employees, including grants of employee stock options, are expensed
based on their estimated fair values at grant date, in accordance
with ASC 718.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Compensation expense for stock options is recorded over the vesting
period using the estimated fair value on the date of grant, as
calculated by the Company using the Black-Scholes model. The
Company classifies all share-based awards as equity instruments and
recognizes the vesting of the awards ratably over their respective
terms.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
See Note 11 for a description of the Company’s share-based
compensation plan and information related to awards granted under
the plan.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<font style="FONT-SIZE: 10pt"><u>Net Loss Per Share</u> –
Basic net loss per share is computed by dividing net loss
attributable to common shareholders by the weighted average number
of shares of common stock outstanding during the period. The
calculation of basic loss per share gives retroactive effect to the
recapitalization related to the reverse acquisition of AbTech
Industries by AbTech Holdings.</font> <font style="FONT-SIZE: 10pt">The Company has other potentially dilutive
securities outstanding that are not shown in a diluted net loss per
share calculation because their effect in both 2011 and 2010 would
be anti-dilutive. These potentially dilutive securities include
Series A Preferred Stock, options, warrants and convertible
promissory notes (see Notes 10 and 11), and total 31,667,254 shares
at December 31, 2011 and 19,271,902 shares at December 31,
2010.</font></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Conversion Options</u> – The Company bifurcates conversion
options embedded in financial instruments and accounts for them at
fair value when required. The Company has determined that none of
its embedded conversion options require bifurcation.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Imputed Interest</u> – A note issued solely for cash equal
to its face amount is presumed to earn the stated rate of interest.
However, in some cases the parties may also exchange unstated (or
stated) rights or privileges, which are given accounting
recognition by establishing a note discount or premium account. In
such cases, the Company imputes interest when required.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<u>Business Combination</u> – The Company has accounted for
the reverse acquisition discussed above in accordance with ASC
805-40 (Reverse Acquisitions). Goodwill is measured as the excess
of the fair value of the consideration effectively transferred over
the net amount of ABHD’s recognized identifiable assets and
liabilities. The 10,000,000 shares of ABHD outstanding immediately
prior to the reverse acquisition represent the consideration
transferred for the merger. Prior to the announcement of the
merger, ABHD’s stock had no material value. No assets were
acquired and liabilities assumed were insignificant. The Company
estimated the value of the 10,000,000 shares transferred in the
acquisition to be $10,000, which the Company has recognized as
goodwill at December 31, 2011 and 2010.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b>Recent Accounting Pronouncements</b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
With the exception of those discussed below, there have been no
recent accounting pronouncements or changes in accounting
pronouncements during the year ended December 31, 2011, that are of
significance, or potential significance, to the Company.</p>
<p style="TEXT-ALIGN: justify; TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In December 2010, the FASB issued authoritative guidance clarifying
the determination of the impairment of goodwill and the related
calculation of that impairment (“Step 2”) when entities
have reporting units with zero or negative carrying amounts. For
entities with reporting units with zero or negative carrying
values, Step 2 is required if it is more likely than not that a
goodwill impairment exits. The adoption of this guidance had no
material effect on the Company’s financial statements.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In May 2011, the FASB issued authoritative guidance regarding
measurement of fair value and for disclosing information about fair
value measurements. Application of the highest and best use and
valuation premise concepts are clarified for use in measuring the
fair value of nonfinancial assets and are not relevant when
measuring the fair value of financial assets or of liabilities. New
disclosures should disclose quantitative information about the
unobservable inputs used in a fair value measurement that is
categorized within Level 3 of the fair value hierarchy. This
guidance becomes effective for the Company for fiscal years and
interim periods within those years beginning in 2012. The Company
does not anticipate adoption of this guidance will have a material
effect on the Company’s financial statements.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In September 2011, the FASB issued authoritative guidance providing
the option to first assess qualitative factors when testing
goodwill for impairment. Entities have the option to first evaluate
qualitative factors to determine whether the existence of events or
circumstances, that in totality, would be more likely than not that
the fair value of a reporting unit is less than its carrying
amount. If the qualitative evaluation determines it is not more
likely than not that the fair value of a reporting unit is less
than its carrying amount, then performing the two-step impairment
test is unnecessary. This guidance becomes effective for the
Company for fiscal years and interim periods within those years
beginning in 2012. The Company does not anticipate adoption of this
guidance will have a material effect on the Company’s
financial statements.</p>
</div>
<div>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 7 - RELATED PARTY TRANSACTIONS</u></b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Accounts receivable; related party</u></i> – represents
amounts due from distributors owned by certain ABHD stockholders.
Management deems the remaining balance at December 31, 2011, net of
reserves taken, to be collectible.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Royalty Agreement</u></i> – In 2009, the Company
entered into a Royalty Agreement (the “Agreement”) with
Hydrophix of California (“Hydrophix”), a distributor
owned by two stockholders of the Company. The Agreement requires
the Company to pay to Hydrophix a royalty equal to 5-10% of
revenues generated by AbTech on certain products sold by AbTech, up
to a maximum total royalty of $1,086,000. The first $104,665 of
royalties due under the Agreement is to be retained by AbTech as
payment for outstanding amounts due from Hydrophix. The term of the
Agreement is ten years or the date on which total royalty payments
reach $1,086,000. As of December 31, 2011, $1,906 of royalties had
been earned by Hydrophix and applied under this Agreement to
amounts due from Hydrophix. The remaining $102,759 due from
Hydrophix, that is to be offset by future royalties payments due
under the Agreement, is included in “<i>Prepaids and other
current assets</i>” net of a $77,000 reserve.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Due to related party</u></i> – represents amounts owed
to a related company for services provided in the form of office
and clerical support, and cash advances. On December 31, 1998, the
Company executed a loan document in the amount of $127,353, with an
original maturity date of December 31, 2003 (extended to December
31, 2013), with interest accruing at the rate of 5% per annum until
the loan is paid in full. In the event of default of principal or
interest, the entire unpaid balance, including principal and
interest, will be due and payable without notice, with interest
accruing at 8% from the date of default.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i> </i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Convertible Promissory Notes</u></i> – In 2011,
director purchase a Convertible Note and accompanying warrant for
333,333 shares, for $500,000 in the July Offering (see Note 14
– PRIVATE PLACEMENTS). $200,000 of the purchase price was
remitted in the form of a non-interest bearing Senior Convertible
Promissory Note due from AbTech Industries in the amount of
$200,000. In 2011, a Convertible Note held by this director in the
principal amount of $100,000 was purchased by another investor and
converted with interest into 198,980 shares of Company common
stock. Refer to Note 10 – CONVERTIBLE PROMISSORY NOTES for a
summary of debt held by related parties at December 31, 2011 and
2010.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Equity-</u></i> In 2011, the Company granted 16,000 shares of
common stock to a director for financial services provided by the
director to the company. The shares were valued at $0.42 per shares
and recorded as stock issued for services.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Stock Options</u></i> – All of the 4,734,300 stock
options granted by the Company in 2011 were granted to directors
and officers of the company (see Note 11 –
STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION).</p>
</div>
5320566
20784
-5385803
-0.11
436222
1620955
118136
44160713
<div>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 10 – CONVERTIBLE PROMISSORY NOTES</u></b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
At December 31, 2011 and December 31, 2010 the Company had
promissory notes outstanding of $6,372,763 and $5,321,545,
respectively, convertible into shares of the Company’s common
stock. The conversion rate, interest rate and maturity dates of the
notes outstanding at December 31, 2011 are shown in the table
below:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
Type of Financing</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt; FONT-WEIGHT: bold" colspan="2">Principal Amount</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt; FONT-WEIGHT: bold" colspan="2">Interest Rate</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt; FONT-WEIGHT: bold" colspan="2">Conversion Rate</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
Maturity Date</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
Related Party</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; WIDTH: 34%; FONT-SIZE: 10pt">
 Junior Convertible Notes</td>
<td style="WIDTH: 3%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 12%; FONT-SIZE: 10pt">
100,000</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 3%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">%</td>
<td style="WIDTH: 3%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 12%; FONT-SIZE: 10pt">
0.50</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 3%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; WIDTH: 12%; FONT-SIZE: 10pt">
9/30/2011</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">750,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
3/31/2013</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">400,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
7/7/2013</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">200,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
12/19/2013</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">325,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
2/3/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">200,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
4/16/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">6,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
5/11/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 ABHD Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">500,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.60</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
4/30/2012</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.12in; PADDING-LEFT: 0.24in; FONT-SIZE: 10pt">
 Unamortized discount on ABHD Convertible Notes</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(21,319</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Subtotal - related party</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
2,459,681</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
Non-related party</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Note</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">55,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
4/8/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">100,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
11/25/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 ABHD Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">200,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.60</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
4/30/2012</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Secured ABHD Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">25,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
5/15/2012</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Secured ABHD Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">25,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
5/18/2012</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Secured ABHD Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">50,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
5/22/2012</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Secured ABHD Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">550,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
6/3/2012</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Secured ABHD Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">675,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
6/19/2012</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Secured ABHD Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">650,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
7/24/2012</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Secured ABHD Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">1,645,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
8/18/2012</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Secured ABHD Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">380,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.70</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
8/24/2012</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.12in; PADDING-LEFT: 0.24in; FONT-SIZE: 10pt">
 Unamortized discount on Secured ABHD Notes</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(441,918</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; TEXT-INDENT: 0px; PADDING-LEFT: 0.24in; FONT-SIZE: 10pt">
Subtotal - non-related party</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
3,913,082</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: 0px; PADDING-LEFT: 0.6in; FONT-SIZE: 10pt">
Total</td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
6,372,763</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i> </i></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The conversion rate, interest rate and maturity dates of the notes
outstanding at December 31, 2010 are shown in the table below:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i> </i></p>
<table style="WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
Type of Financing</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt; FONT-WEIGHT: bold" colspan="2">Principal Amount</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt; FONT-WEIGHT: bold" colspan="2">Interest Rate</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt; FONT-WEIGHT: bold" colspan="2">Conversion Rate</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
Maturity Date</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
Related Party</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; WIDTH: 34%; FONT-SIZE: 10pt">
 Junior Convertible Notes</td>
<td style="WIDTH: 3%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 12%; FONT-SIZE: 10pt">
1,156,000</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 3%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">%</td>
<td style="WIDTH: 3%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 12%; FONT-SIZE: 10pt">
2.65</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 3%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; WIDTH: 12%; FONT-SIZE: 10pt">
9/30/2011</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">750,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
3/31/2013</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">400,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
7/7/2013</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">200,001</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
8/27/2013</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">200,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
12/19/2013</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">325,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
2/3/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">200,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
4/16/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">6,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
5/11/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
500,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
%</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
6/26/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Subtotal - related party</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
3,737,001</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt; FONT-WEIGHT: bold">
Non-related party</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">100,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
10/3/2013</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">100,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
1/8/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">50,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
10/3/2013</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Note</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">55,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
4/8/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Note</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">100,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
5/8/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">50,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
6/12/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">50,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
11/5/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">100,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
11/25/2014</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Note</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">100,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
2/5/2015</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Notes</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">185,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
2/9/2015</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Note</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">25,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
2/12/15</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Note</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">300,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
4/13/15</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Note</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">125,865</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
7/15/15</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Senior Convertible Note</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">35,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
9/10/15</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Promissory Note</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">83,679</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
8/2/10</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Promissory Note</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">100,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
8/26/10</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Promissory Note</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
25,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">12</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
%</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
5/2/11</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 0px; PADDING-LEFT: 0.24in; FONT-SIZE: 10pt">
Subtotal - non-related party</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
1,584,544</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: 0px; PADDING-LEFT: 0.6in; FONT-SIZE: 10pt">
Total</td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
5,321,545</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 5.4pt; FONT-SIZE: 10pt">
 </td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>  </i></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The terms of the various types of convertible notes included in the
tables above are described as follows:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Junior Convertible Notes and Senior Convertible Notes</u></i>
– These notes are convertible into shares of AbTech Series A
preferred stock and, consequently, into shares of ABHD common
stock. The conversion rate shown in the table above reflects the
rate at which the notes could be converted into shares of ABHD
common stock. The notes are due in full at maturity but may be
prepaid at any time prior to the maturity date with proper notice
to the note holder. In the event of liquidation of AbTech, the
Senior Convertible Notes have priority in right of payment over the
Junior Convertible Notes. Additionally, holders of Senior
Convertible Notes have priority over any amounts due stockholders
of AbTech, regardless of the form of payment which may be due. Two
notes included in the table above have maturity dates prior to
December 31, 2011, however, each of the note holders has indicated
their intention to convert the notes in accordance with their terms
in 2012.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>ABHD Convertible Notes</u></i> – These notes were
issued as part of the July Offering (see Note 14 - PRIVATE
PLACEMENTS).</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Secured ABHD Convertible Notes</u></i> – These notes
were issued in the September Offering (see Note 14 - PRIVATE
PLACEMENTS).</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Aggregate maturities of debt obligations commencing in 2012
are:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 50%" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2013</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2014</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Total</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 20%; FONT-SIZE: 10pt">
4,800,000</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 5%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 19%; FONT-SIZE: 10pt">
1,350,000</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 5%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 19%; FONT-SIZE: 10pt">
686,000</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 5%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 19%; FONT-SIZE: 10pt">
6,836,000</td>
</tr>
</table>
</div>
<div>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">
<b><u>NOTE 6 - LOANS FROM SHAREHOLDERS</u></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
 </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
Loans from shareholders at December 31, 2011 and 2010 consist of
one and four, respectively, short-term loans made by Directors of
the Company to the Company or its subsidiary, ESC with balances of
$9,000 and $180,500 respectively. These loans are unsecured and the
single loan remaining as of December 31, 2011 was non-interest
bearing and “due on demand.”</p>
</div>
<div>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 2 – GOING CONCERN</u></b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<font style="text-underline-style: none"><b> </b></font></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The accompanying consolidated financial statements have been
prepared in conformity with generally accepted accounting
principles, which contemplate continuation of the Company as a
going concern. As shown in the consolidated financial statements,
the Company has incurred ongoing net losses since inception. These
losses, with the associated substantial accumulated deficit, are a
direct result of the Company’s product development activities
and the costs of introducing its technologies to the market and
pursuing market acceptance. In view of these matters, realization
of a major portion of the assets in the accompanying consolidated
balance sheets is dependent upon continued operations of the
Company which in turn is dependent upon the Company’s ability
to meet its financing requirements, and the success of its future
operations. The Company operates in a new, developing industry with
a variety of competitors. These factors raise substantial doubt
about the Company’s ability to continue as a going
concern.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 <font style="BACKGROUND-COLOR: white"> </font></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Management believes that the Company’s ability to continue as
a going concern will be dependent on its ability to raise
additional capital and/or generate significant sales growth in the
short term. The Company’s ability to achieve these objectives
cannot be determined at this time. Management’s plans in
regard to these matters are described as follows:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<font style="BACKGROUND-COLOR: white"> </font></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Sales and Marketing</i>. Historically, the Company has selected
qualified distributors to represent its products in key geographic
markets. The recent economic downturn and other factors have led to
a significant contraction in sales revenue as municipalities, the
Company’s primary customers, experienced severe budgetary and
financial constraints. In an attempt to reinvigorate sales, the
Company has redirected its focus on multiple market segments and
has revised its go-to-market strategy by disengaging distributors
with exclusive geographic territories, in favor of new alliances
with larger, market-dominant companies to cover entire market
segments such as municipal stormwater, federal facilities and
industrial process water. In early 2011, the Company signed its
first such distribution agreement with Waste Management, Inc., a
company that has a major presence in the public sector market.
Under this distribution agreement, market rollout was initiated in
three market areas during 2011 and is planned to move into other
areas of the country during 2012. The Company is also making
efforts to expand into specific foreign markets and new markets
addressing treatment of contaminated water.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i> </i></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Financing.</i> To date, the Company has financed its operations
primarily with loans from shareholders, private placement
financings and sales revenue. During 2011, the Company raised
$825,000 in a private offering of common stock, raised $1,722,100
in a series of transactions that allowed the Company to repay or
convert to stock approximately $1,350,000 of debt, raised $700,000
in a private offering of convertible promissory notes and raised
$4,000,000 in a private offering of secured convertible promissory
notes. In February, 2012, the Company received an additional
$2,600,000 in the final closing of the private offering of secured
convertible promissory notes. Management believes that with
continued field validation successes, an improving economy, federal
regulatory approval of the Company’s antimicrobial
technologies, and new strategic alliances with companies that are
dominant in key market sectors, sales revenue can grow rapidly,
thus enabling the Company to reverse its negative cash flow and
raise additional capital as needed. There is no assurance that the
Company can achieve sustainable operations or that additional
capital, if needed, will be available on acceptable terms.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The consolidated financial statements do not include any
adjustments relating to the recoverability and classification of
recorded asset amounts or the amount and classification of
liabilities or any other adjustment that might be necessary should
the Company be unable to continue as a going concern.</p>
</div>
456079
<div>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b>NOTE 14 – PRIVATE PLACEMENTS</b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><i>Private Placement in July 2011</i></b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In July 2011, the Company sold $700,000 of Convertible Promissory
Notes (the “July Offering”). The Convertible Promissory
Notes (the “Notes”) bear interest at a rate of twelve
percent (12%) per annum from the closing date through April 30,
2012; fifteen percent (15%) per annum from May 1, 2012 through July
31, 2012 and eighteen percent (18%) per annum for any period after
July 30, 2012 that the Note remains outstanding. All interest
accrued on the Notes will be due and payable at maturity. Any Notes
outstanding on November 1, 2012 will be redeemed in cash equal to
the face amount plus any unpaid accrued interest thereon. In the
event of a Qualified Financing by the Company, as defined below,
each subscriber in the Offering will have the option to (i) convert
their Note into the securities purchased by investors in a
Qualified Financing at a 20% discount to the price paid by
investors in the Qualified Financing; or (ii) tender their Note to
the Company for immediate repayment of principal and accrued and
unpaid interest. A “Qualified Financing” is defined as
the sale for cash by the Company of debt or equity securities
generating aggregate gross proceeds of at least US $5,000,000
(including the proceeds from any converting Notes). In the event
that the Company does not close a Qualified Financing on or prior
to November 1, 2012, the Note holder shall have the option to
convert the Note into shares of Company common stock at a
conversion price equal to $0.60 per share (the “Conversion
Price”). The Company may, at any time on ten business
days’ notice, repurchase any or all outstanding Notes in cash
for the face amount of such Notes, plus any unpaid, accrued
interest thereon. Upon such notice from the Company, Note holders
will have 5 days to either convert the Notes in accordance with
their terms or accept the cash repurchase price from the
Company.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Each subscriber in the July Offering also received a warrant for
the purchase of the number of shares of the Company’s common
stock equal to forty percent (40%) of the amount invested divided
by the Conversion Price. In the event a Note remains outstanding as
of April 30, 2012, the Note holder will receive an additional
warrant for 10% of the principal amount of the Note outstanding at
that date divided by the Conversion Price. In the event the Note
remains outstanding as of July 31, 2012, the Note holder will
receive an additional warrant for 10% of the principal amount of
the Note outstanding at that date divided by the Conversion Price.
The warrants will have an exercise price equal to the Conversion
Price and a five year term.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><i>Private Placement in September 2011</i></b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<font style="FONT: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<font style="FONT: 10pt Times New Roman, Times, Serif">From
September 19 through December 31, 2011, the Company sold $4,000,000
of Secured Convertible Promissory Notes (the “September
Offering”).</font> <font style="FONT: 10pt Times New Roman, Times, Serif">The Secured Convertible
Promissory Notes (the “Secured Notes”) bear interest at
a rate of twelve percent (12%) per annum and are due and payable in
full on the nine (9) month anniversary of issuance (the
“Original Maturity Date”). The Company may extend the
maturity date by an additional ninety (90) day period (the
“First Extension Option”), during which period the
interest rate will increase to fifteen percent (15%) per annum on
the unpaid principal of the Secured Note. The Company may also
extend the maturity date by a second additional 90 day period (the
“Second Extension Option”) during which period the
interest rate shall increase to eighteen percent (18%) per annum on
the unpaid principal of the Secured Note. All interest accrued on
the Secured Notes through the Original Maturity Date will be
payable by the Company on the Original Maturity Date in cash or
in-kind, at the option of the payee. For all periods after the
Original Maturity Date, all accrued interest will be payable
quarterly in cash by the Company. The Secured Notes may be
converted into shares of common stock of the Company at any time
prior to a Qualified Financing at the conversion rate of $0.70 per
share (the “Conversion Price”). However, if the Company
at any time while a Secured Note is outstanding, issues any debt or
equity securities (with certain exceptions) entitling investors to
subscribe for, purchase, or convert such securities into shares of
Company common stock at a price per share less than the Conversion
Price (the “New Securities Issuance Price”) then the
Conversion Price for such outstanding Secured Notes shall be
reduced effective concurrently with such issuance to the New
Securities Issuance Price.</font></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In the event of a Qualified Financing by the Company, as defined
above, each subscriber in the September Offering will have the
option to (i) convert their Secured Note into the securities
purchased by investors in a Qualified Financing at a 20% discount
to the price paid by investors in the Qualified Financing; or (ii)
tender their Secured Note to the Company for immediate repayment of
principal and accrued and unpaid interest. The Secured Notes may be
prepaid in whole or in part without the prior written consent of
the payee at any time following not less than ten (10) days prior
written notice to the subscriber notifying the subscriber of the
Company’s decision to prepay the Secured Notes.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Secured Notes are secured by all of the Company’s right,
title and interest in, to and under all personal property and other
assets of the Company (the certain exceptions to allow for
potential financing arrangements for accounts receivable and
inventory) pursuant to a Security Agreement entered into by the
Company.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Each subscriber in the September Offering also received a warrant
for the purchase of the number of shares of Company common stock
equal to forty percent (40%) of the number of shares of common
stock into which the Secured Notes are convertible on the closing
date of the Qualified Financing. In the event a Secured Note
remains outstanding beyond the Original Maturity Date, the Secured
Note holder will receive an additional warrant for 10% of the
principal amount of the Secured Note outstanding at that date
divided by the Conversion Price. The number of warrant shares that
the Payee will be entitled to under the terms of the warrant issued
by the Company to subscribers in connection with the September
Offering shall be increased by ten percent (10%) for each Extension
Option exercised by the Company. The warrants will have an initial
exercise price equal to the exercise price of the warrants
purchased by investors in the Qualified Financing. In the event the
Holder elects to exercise the warrant prior to the consummation of
a Qualified Financing, the number of shares exercisable will be
based on an assumed conversion price of $0.60 per share (the
“Assumed Conversion Price”) and the exercise price will
be $0.60 per share (the “Base Exercise Price”).
However, in the event that the Company issues shares of common
stock or common stock equivalents (with certain exceptions) at any
time after the issuance of the warrant and prior to a Qualified
Financing at a price per share less than the Base Exercise Price
(the “New Securities Exercise Price”) then the Base
Exercise Price and the Assumed Conversion Price shall each be
reduced effective concurrently with such issuance to the New
Securities Exercise Price. Each warrant will be exercisable for a
five (5) year period.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Notes issued in connection with the July Offering and the
Secured Notes issued in connection with the September Offering have
been discounted by the value of the detachable warrants issued with
the Notes and the Secured Notes. The value of the warrants was
bifurcated from the value of the Notes and shown separately as
warrant liability because of certain down-round price protection
features of the warrants. The warrant liability value is revalued
at each reporting period. The value of the warrants was estimated
by applying the Black Scholes model and amounted to $622,895. This
corresponding note discount is amortized over the life of the
Secured Notes using the effective interest method. The amount of
the discount amortized and charged to interest as of December 31,
2011 was $159,657. The estimated value of the warrants upon grant
is $741,028 and the estimated value of the warrant liability at
December 31, 2011 is $498,976 (see Note 15 – FAIR VALUE OF
FINANCIAL INSTRUMENTS).</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Company paid the Placement Agent engaged in connection with the
September Offering a cash placement fee equal to eight percent (8%)
of the aggregate purchase price paid by each investor. This fee
amounted to $320,000 for the $4,000,000 received through December
31, 2011. The placement agent will also receive a cash fee equal to
four percent (4%) of all amounts received by the Company in
connection with the exercise by investors of any warrants received
by investors in connection with the September Offering. In addition
to the placement agent fee, the Company will issue to the placement
agent warrants to purchase a number of shares of the
Company’s common stock obtained by dividing eight percent
(8%) of the gross proceeds from the sale of securities by the
conversion price of the Secured Notes (the “PA
Warrants”). The PA Warrants issued in connection with the
September Offering will have an exercise price per share equal to
the conversion price of the Secured Notes. The PA Warrants will
expire five years from the date of issuance and will be in the same
form as the securities sold in the September Offering, except that
the PA Warrants will include a “net issuance” cashless
exercise feature. As of December 31, 2011, PA Warrants for 533,333
shares of common stock were due to the placement agent. The value
of these warrants was estimated by applying the Black Scholes model
and amounted to $118,133, upon grant. The balance was recorded as a
deferred financing charge and its estimated fair value at December
31, 2011 is included in the warrant liability at December 31,
2011.</p>
</div>
20784
1620955
1184450
<div>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><u>NOTE 11 – STOCKHOLDERS’ EQUITY AND STOCK-BASED
COMPENSATION</u></b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Stock Options</u></i></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Company grants stock options to officers, directors, employees
and consultants under stock plans.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b>AbTech’s 2007 Stock Plan</b> - Prior to the Merger with
ABHD, AbTech issued stock options under a plan ( the “2007
Stock Plan”) that allowed up to 15% of the capital stock
outstanding of AbTech to be available for awards granted under the
plan. Options granted under the plan expire on the earlier of the
stated expiration date or, in the case of incentive stock options,
ninety days after the date employment ends or, in the case of
non-statutory options, 30 days after the optionee ceases to be a
service provider to the Company. The stated expiration dates occur
between 2012 and 2020. Stock options were granted at the fair
market value of the common stock as determined by the Board of
Directors on the date of grant and are exercisable subject to
vesting provisions and performance objectives. All outstanding
stock options granted by AbTech outstanding as of the date of the
reverse acquisition transaction with ABHD automatically convert
into options for the purchase of shares of ABHD common stock at the
rate of 5.32 shares of ABHD stock for each share of AbTech stock.
ABHD will issue new authorized shares for the AbTech stock options
exercised after February 10, 2011, the date of the Merger.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b>ABHD’s 2012 Incentive Stock Plan</b> – In December
2011, the Board of Directors of ABHD approved the 2012 Incentive
Stock Plan (the “2012 Plan”), which allows for up to
9,000,000 shares of common stock awards to be granted during the
term of the plan. The exercise price of options granted under the
2012 Plan is determined by the 2012 Plan Committee and may not be
less than 100% of the fair market value of the common stock of ABHD
on the grant date. Options expire not more than 10 years from the
date of grant. Options granted under the plan have a minimum
vesting period of one year from the date of grant.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
For the years ended December 31, 2011 and 2010, compensation
expense of $77,532 and $163,420, respectively, for stock options
accounted for under ASC 718 is included in <i>Selling, general and
administrative</i> expense in the consolidated statements of
operations. There was no related tax benefit recognized due to the
Company’s loss position. At December 31, 2011, the Company
had approximately $1,338,963 of total unrecognized compensation
cost related to unvested stock options. This cost is expected to be
recognized over a weighted-average period of approximately 1.7
years. No cash was received from the exercise of stock options
during 2011 or 2010.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Compensation expense was determined from the estimates of fair
values of stock options granted using the Black-Scholes option
pricing model. The following table summarizes the weighted average
of fair value and the significant assumptions used in applying the
Black-Scholes model for options granted in 2011 and 2010:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 90%" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 0px; TEXT-INDENT: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-SIZE: 10pt; PADDING-TOP: 0px">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 0px; TEXT-INDENT: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-SIZE: 10pt; PADDING-TOP: 0px">
Weighted average of fair value for options granted</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; TEXT-INDENT: 0px; PADDING-LEFT: 0.36in; WIDTH: 72%; PADDING-RIGHT: 0px; FONT-SIZE: 10pt; PADDING-TOP: 0px">
AbTech Options    </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
0.90</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; TEXT-INDENT: 0px; PADDING-LEFT: 0.36in; PADDING-RIGHT: 0px; FONT-SIZE: 10pt; PADDING-TOP: 0px">
ABHD Options</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.27</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; TEXT-INDENT: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-SIZE: 10pt; PADDING-TOP: 0px">
 </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 0px; TEXT-INDENT: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-SIZE: 10pt; PADDING-TOP: 0px">
Weighted average assumptions used:</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 0px; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; PADDING-RIGHT: 0px; FONT-SIZE: 10pt; PADDING-TOP: 0px">
Expected dividend yield</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 0px; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; PADDING-RIGHT: 0px; FONT-SIZE: 10pt; PADDING-TOP: 0px">
Expected volatility</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">81.5</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">13.0-15.0%</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 0px; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; PADDING-RIGHT: 0px; FONT-SIZE: 10pt; PADDING-TOP: 0px">
Risk-free interest rate</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">1.9</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">2.1</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">%</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 0px; TEXT-INDENT: 0px; PADDING-LEFT: 0.12in; PADDING-RIGHT: 0px; FONT-SIZE: 10pt; PADDING-TOP: 0px">
Expected life (in years)</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">5.0</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">8.7</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
</table>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The assumptions for expected dividend yield, expected volatility
and expected term reflect management’s judgment and include
consideration of historical experience. Expected volatility is
based on historical volatility of the Company’s shares and
the historical volatility of public companies or mutual funds
operating in similar markets. The risk-free interest rate is based
on the U.S. Treasury yield curve in effect at the time of grant for
periods corresponding with the expected life of the option.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The Company’s stock option activity for the years ending
December 31, 2011 and 2010 is summarized below:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b>AbTech Options –</b> Share amounts and exercise prices
included in this table are stated in terms of AbTech shares as
originally issued. The ABHD equivalent number of shares is
approximately 5.32 times the number of AbTech shares and the ABHD
equivalent exercise price is 1/5.32 times the AbTech exercise
price.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Number of AbTech Shares Under Option</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Weighted Average Exercise Price</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Weighted Average Remaining Term</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; WIDTH: 58%; FONT-SIZE: 10pt">
Balance at December 31, 2009</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
780,000</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
3.74</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
4.97</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Granted</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">621,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Exercised</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Forfeited or expired</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(400,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
3.72</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Outstanding at
December 31, 2010</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">1,001,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">3.75</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">6.56</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Forfeited or expired</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(494,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
3.75</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
Outstanding at December 31, 2011</td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
507,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
3.75</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
3.45</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
As of December 31, 2011, there were 507,000 stock options
outstanding and exercisable with a weighted average remaining life
of 3.45 years and an intrinsic value of $0.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b>  </b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>ABHD
Options</b></p>
<table style="WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Number of ABHD Shares Under Option</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Weighted Average Exercise Price</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Weighted Average Remaining Term</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Balance at
December 31, 2009</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.12in; WIDTH: 58%; FONT-SIZE: 10pt">
 Granted</td>
<td style="PADDING-BOTTOM: 1pt; WIDTH: 2%; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
640,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-SIZE: 10pt">
<sup> (1)</sup></td>
<td style="PADDING-BOTTOM: 1pt; WIDTH: 2%; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
0.55</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; WIDTH: 2%; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Outstanding at
December 31, 2010</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">640,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.55</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">4.86</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Granted</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
4,734,300</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
0.42</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
Outstanding at December 31, 2011</td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
5,374,300</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
0.44</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
9.58</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><sup>(1)</sup></td>
<td style="TEXT-ALIGN: justify">These options were previously
excluded, however, the exclusion had no effect on the consolidated
statement of operations as the options did not begin to vest until
2011.</td>
</tr>
</table>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
As of December 31, 2011, there were 5,374,300 stock options
outstanding with a weighted average remaining life of 9.6 years and
an intrinsic value of $0. As of December 31, 2011, there were
approximately 320,000 options exercisable with a weighted average
remaining life of 3.86 years and an intrinsic value of $0. Of the
non-exercisable stock options outstanding at December 31, 2011,
3,865,000 stock options vest over time between 2012 and 2015 and
1,189,300 stock options vest only upon the Company achieving
specific performance objectives in 2011.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The following table summarizes the activity of the shares and
weighted-average grant date fair value of the Company’s
non-vested common stock options during the years ending December
31, 2011 and 2010:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="6">Non-vested AbTech Shares</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="6">Non-vested ABHD Shares</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Number of Shares</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">Weighted-<br />
average<br />
grant date<br />
fair value</td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">Number of Shares</td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">Weighted<br />
-average<br />
grant date<br />
fair value</td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; WIDTH: 44%; FONT-SIZE: 10pt">
Non-vested at December 31, 2009</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
267,999</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
1.49</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Granted</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">621,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.90</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">640,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Vested</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">(185,999</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">)</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.88</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Forfeited or expired</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(233,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
1.45</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; FONT-SIZE: 10pt">Non-vested at
December 31, 2010</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">470,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.96</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">640,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Granted</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">4,734,300</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.27</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Vested</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">(75,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">)</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.53</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">(320,000</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">)</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">0.12</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Forfeited or expired</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(395,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
1.04</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
Non-vested at December 31, 2011</td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
5,054,300</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
0.27</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Common stock</u></i></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In conjunction with the Merger that occurred in February 2011, the
Company sold 2,320,000 shares of common stock for $2,320,000 of
cash, of this amount 1,495,000 shares were issued during 2010 and
825,000 shares were issued during 2011 (see Note 12 - REVERSE
ACQUISITION TRANSACTION).</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Warrants</u></i></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In 2011 the Company issued the following warrants:</p>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify">Thirty investors participating in
the September Private Placement (see Note 14 - PRIVATE PLACEMENTS)
received warrants to purchase 2,666,667 shares of ABHD common
stock. In addition, the placement agent received warrants to
purchase 533,333 shares of ABHD common stock.</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify">Three individuals participating in
the July Offering (see Note 14 - PRIVATE PLACEMENTS) received
warrants to purchase 466,666 shares of ABHD common stock.</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify">Two individuals received warrants
to purchase 530,000 shares of ABHD common stock as compensation for
consulting services provided to the Company. These warrants have an
exercise price of $0.50 per share. One warrant for 30,000 shares
expires on July 23, 2013 and the other warrant for 500,000 shares
expires on February 28, 2014. Compensation expense related to these
warrants of $58,014 was included in <i>Selling, general and
administrative</i> expense in the consolidated statements of
operations.</td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
In 2010 the Company issued the following warrants:</p>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify">Four individuals received warrants
to purchase 130,000 shares of AbTech common stock as compensation
for consulting services provided to the Company. Warrants for
120,000 shares have an exercise price of $4.25 per share and are
exercisable at any time prior to January 11, 2015. Warrants for
10,000 shares have an exercise price of $3.75 per share and are
exercisable at any time prior to April 17, 2015. Compensation
expense related to these warrants of $68,024 was included in
<i>Selling, general and administrative</i> expense in the
consolidated statements of operations.</td>
</tr>
</table>
<table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0">
<tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top">
<td style="WIDTH: 0.25in"></td>
<td style="TEXT-ALIGN: left; WIDTH: 0.25in"><font style="FONT-FAMILY: Symbol">·</font></td>
<td style="TEXT-ALIGN: justify">One individual received a warrant
to purchase 10,933 shares of AbTech common stock with an exercise
price of $3.75 per share as a finder’s fee in conjunction
with raising capital. The warrants are exercisable at any time
prior to April 7, 2015 and April 30, 2015, respectively.
Compensation expense related to this warrant of $7,821 was included
in <i>Other income (expense)</i> in the consolidated statements of
operations.</td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
All outstanding warrants issued by AbTech are automatically
converted in to warrants for ABHD common stock at a conversion rate
of approximately 5.32 shares of ABHD for each share of AbTech.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
A summary of common stock warrants and Series A Preferred Stock
warrants outstanding at December 31 is as follows:</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: center; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="6">AbTech Warrants</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="6">ABHD Warrants</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: center; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">Number of<br />
Warrants</td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Weighted-average Exercise Price</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT: 10pt Times New Roman, Times, Serif" colspan="2">Number of<br />
Warrants</td>
<td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-SIZE: 10pt" colspan="2">Weighted-average Exercise Price</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="WIDTH: 44%; FONT-SIZE: 10pt">Outstanding at December 31,
2009</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
830,777</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
4.19</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Granted</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">140,933</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">4.18</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Exercised</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Forfeited or expired</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(20,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
3.75</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="FONT-SIZE: 10pt">Outstanding at December 31, 2010</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">951,710</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">4.20</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Granted</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">4,196,666</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">.59</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Exercised</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">-</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.12in; FONT-SIZE: 10pt">
 Forfeited or expired</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
(621,000</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
4.25</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">Outstanding at
December 31, 2011</td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
330,710</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
4.10</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
4,196,666</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
.59</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt">
 </td>
</tr>
</table>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The 330,710 exercisable AbTech warrants outstanding at December 31,
2011 expire at various dates through 2015 and have a weighted
average remaining life of 2.5 years.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The 4,196,666 exercisable ABHD warrants outstanding at December 31,
2011 expire at various dates through 2016 and have a weighted
average remaining life of 4.5 years.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>AbTech Series A Convertible Preferred Stock</u></i></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
AbTech has designated 3,500,000 of its 5,000,000 authorized
preferred shares as Series A Convertible Preferred Stock
(“Series A Stock”) and has 1,439,614 of such shares
issued and outstanding at December 31, 2011. These shares represent
the non-controlling interest in the Company’s subsidiary as
shown on the Consolidated Balance Sheets and Consolidated
Statements of Operations. Series A Stock has a par value of $0.01
and no liquidation or dividend preferences.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
The holders of Series A Stock may at any time elect to convert any
or all such shares into common shares of the Company at a
conversion rate initially set at one share of common stock for each
share of Series A Stock, subject to certain anti-dilution
adjustments that protect Series A Stockholders if the Company
issues new shares at less than $3.75 per share. The Series A Stock
will automatically convert into common shares upon either (a) the
closing of a firm underwritten public offering, (b) subsequent
listing on the New York Stock Exchange or the NASDAQ Global Market,
or (c) upon the sale or transfer of substantially all the assets or
the consolidation or merger with an entity solely for cash or
solely for cash and securities listed on the New York Stock
Exchange or the NASDAQ Global Market.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
While Series A Stockholders have no voting rights as ABHD
stockholders, they do have specific rights pertaining to the
governance of AbTech, ABHD’s subsidiary. As long as Series A
Stockholders hold, on a converted basis, at least 8% of the Common
Stock of the Company, they will be granted a pre-emptive right to
maintain their respective ownership percentages, as determined on a
fully-diluted basis, in subsequent sales of Common Stock or Common
Stock Equivalents conducted by the Company. Series A Stockholders
have a right to designate up to three Directors to the Board of
Directors (Series A Directors) and the Series A Directors are
entitled to choose at least one member of the Audit Committee and
one Member of the Compensation Committee. Corporate governance
provisions were also modified to require various levels of
supermajority approval by the Board for specific, major actions
taken by the Company. For some actions, approval of
2/3<sup>rds</sup> of the Series A Directors is required.</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 <b> </b></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Common shares reserved for future issuance</u></i></p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
As of December 31, 2011, ABHD common shares reserved for future
issuance were as follows (all shares are stated in ABHD share
equivalent):</p>
<p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<font style="BACKGROUND-COLOR: white"> </font></p>
<table style="WIDTH: 80%" cellspacing="0" cellpadding="0" align="center">
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; TEXT-INDENT: 0px; PADDING-LEFT: 0px; WIDTH: 86%; FONT-SIZE: 10pt">
Conversion of convertible AbTech preferred stock</td>
<td style="WIDTH: 2%; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%; FONT-SIZE: 10pt">
7,664,193</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt">
Shares issuable upon conversion of debt</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">9,972,309</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt">
Stock options outstanding</td>
<td style="FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
<td style="TEXT-ALIGN: right; FONT-SIZE: 10pt">8,073,458</td>
<td style="TEXT-ALIGN: left; FONT-SIZE: 10pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt">
Warrants to purchase common stock</td>
<td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 10pt">
5,957,294</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 10pt">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: 0px; PADDING-LEFT: 0px; FONT-SIZE: 10pt">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; FONT-SIZE: 10pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; FONT-SIZE: 10pt">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; FONT-SIZE: 10pt">
31,667,254</td>
</tr>
</table>
</div>
1184450
-4896148
-1184450
-489655
684
684300
7664194
4983
-7664
4984324
825
825000
450
449931
135546
-684
1620955
3058707
7664
20784
824175
320083
825000
320533
537152
0001405858
abhd:AllOtherMember
2011-01-01
2011-12-31
0001405858
abhd:ServicesMember
2011-01-01
2011-12-31
0001405858
us-gaap:CashMember
2011-01-01
2011-12-31
0001405858
us-gaap:AdditionalPaidInCapitalMemberabhd:ServicesMember
2011-01-01
2011-12-31
0001405858
us-gaap:AdditionalPaidInCapitalMemberus-gaap:CashMember
2011-01-01
2011-12-31
0001405858
us-gaap:AdditionalPaidInCapitalMember
2011-01-01
2011-12-31
0001405858
us-gaap:CommonStockMemberabhd:ServicesMember
2011-01-01
2011-12-31
0001405858
us-gaap:CommonStockMemberus-gaap:CashMember
2011-01-01
2011-12-31
0001405858
us-gaap:CommonStockMember
2011-01-01
2011-12-31
0001405858
us-gaap:NoncontrollingInterestMember
2011-01-01
2011-12-31
0001405858
us-gaap:RetainedEarningsMember
2011-01-01
2011-12-31
0001405858
2011-01-01
2011-12-31
0001405858
abhd:AllOtherMember
2010-01-01
2010-12-31
0001405858
abhd:RelatedPartyTransactionsMember
2010-01-01
2010-12-31
0001405858
abhd:ServicesMember
2010-01-01
2010-12-31
0001405858
us-gaap:AdditionalPaidInCapitalMemberabhd:ServicesMember
2010-01-01
2010-12-31
0001405858
us-gaap:AdditionalPaidInCapitalMember
2010-01-01
2010-12-31
0001405858
us-gaap:CommonStockMemberabhd:ServicesMember
2010-01-01
2010-12-31
0001405858
us-gaap:CommonStockMember
2010-01-01
2010-12-31
0001405858
us-gaap:RetainedEarningsMember
2010-01-01
2010-12-31
0001405858
2010-01-01
2010-12-31
0001405858
abhd:AllOtherMember
2011-12-31
0001405858
abhd:RelatedPartyTransactionsMember
2011-12-31
0001405858
us-gaap:AdditionalPaidInCapitalMember
2011-12-31
0001405858
us-gaap:CommonStockMember
2011-12-31
0001405858
us-gaap:NoncontrollingInterestMember
2011-12-31
0001405858
us-gaap:RetainedEarningsMember
2011-12-31
0001405858
2011-12-31
0001405858
abhd:AllOtherMember
2010-12-31
0001405858
abhd:RelatedPartyTransactionsMember
2010-12-31
0001405858
us-gaap:AdditionalPaidInCapitalMember
2010-12-31
0001405858
us-gaap:CommonStockMember
2010-12-31
0001405858
us-gaap:RetainedEarningsMember
2010-12-31
0001405858
2010-12-31
0001405858
us-gaap:AdditionalPaidInCapitalMember
2009-12-31
0001405858
us-gaap:CommonStockMember
2009-12-31
0001405858
us-gaap:RetainedEarningsMember
2009-12-31
0001405858
2009-12-31
0001405858
2011-06-30
0001405858
2012-03-23
shares
iso4217:USD
iso4217:USD
shares